Stock Market Today: Stocks Close Mixed Ahead of January CPI Report
The Dow notched a new record high Monday, while the S&P 500 pulled back from its all-time peak.
Stocks looked like they were headed for a win Monday before a round of late-afternoon selling sent two of the three main benchmarks into the red by the close. Caution appears to be setting in ahead of Tuesday morning's key inflation update, particularly after recent data has signaled a resilient U.S. economy and lowered expectations for an interest rate cut at the next Fed meeting.
The Fed has indicated recently that it needs to see more evidence that the disinflation trend is intact before it starts cutting interest rates. Indeed, "the possibility of a March rate cut seems unlikely but coming into the summer months and back half of the year, we believe the disinflationary trend and other economic data will support such a decision," says Kevin Simpson, founder and chief investment officer at Capital Wealth Planning.
According to CME Group's FedWatch Tool, futures traders are currently pricing in a 16% chance for a quarter-point rate cut in March vs a 52% probability of one in May.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As for the indexes, the Dow Jones Industrial Average (+0.3% at 38,797) notched a new record close Monday. The S&P 500 (-0.09% at 5,021), meanwhile, pulled back from its record close hit on Friday, while the Nasdaq Composite fell 0.3% to 15,942.
With stocks trading at or near record highs, Mark Hackett, chief of investment research at Nationwide, says investors may want to sit tight. "Right now, there's universal optimism and no risk embedded in the market, and it feels like we're a rubber band being stretched thin," Hackett says. "As soon as that rubber band gets a little nick in it, it could snap, leading to extreme volatility."
Nvidia briefly overtakes Amazon's market value
In single-stock news, Nvidia (NVDA) made headlines after the chipmaker's market value briefly surpassed that of fellow Magnificent 7 stock Amazon.com (AMZN). NVDA stock has been rallying hard over the past 18 months or so on optimism around its generative AI (artificial intelligence) chips, and it joined the trillion-dollar market cap club in June.
Today, Nvidia closed up 0.2% lower, bringing its market cap to $1.785 trillion. AMZN shed 1.4%, ending the day with a market value of $1.788 trillion.
Diamondback Energy will buy Endeavor Energy Resources
Elsewhere, Diamondback Energy (FANG) spiked 9.4% after the oil and gas exploration company said it will buy privately held Endeavor Energy Resources in a cash-and-stock deal valued at $26 billion. The news continues a consolidation trend in the oil patch, with blue chip stocks Chevron (CVX, +0.7%) and Exxon Mobil (XOM, +1.4%) announcing their own billion-dollar buyouts last fall.
"The merger, if completed, would make FANG the third largest producer in the Permian Basin, raising the company's production capacity by 76%, growing its net acreage by around 70%, while raising its gross core locations by 61%, which should enable FANG to see healthy cash flow generation, in our view," says CFRA Research analyst Jonnathan Handshoe, who reiterated a Buy rating on the oil stock.
Diamondback also said it is raising its annual dividend by 7% to $3.60 per share.
Related content
- Kiplinger's Earnings Calendar for This Week
- Best Bond ETFs to Buy Now
- What Is a P/E Ratio and How Do I Use It in Investing?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Medicare Drug Plans Are Getting Better Next Year. Some Will Also Cost More.
Upcoming changes to the Part D drug benefit, including a $2,000 cap on out-of-pocket medication, will benefit millions of Americans. But higher premiums may also be on the way
By Susan Jaffe | KFF Health News Published
-
The Worst Credit Cards: Is One in Your Wallet?
If you have one of the worst credit cards, it's time to replace it with a winner. We can help.
By Kathryn Pomroy Published
-
How to Invest at Each Stage of Your Life
Wealth isn’t typically built overnight. It takes a series of moves over time. With that in mind, we’ve crafted a game plan for how best to save and invest at every stage of life.
By Nellie S. Huang Published
-
Five Financial Planning Secrets of Millionaires
You might be surprised: Most millionaires don't feel rich. Instead, they have smart goals, discipline and a little help along the way.
By Kevin Dwyer, CFP®, CLU® Published
-
Financial Hangover Got You Down? Rebalance Your Budget
After overindulging on vacations or other fun, here's how to review your budget and set new goals, without sacrificing the experiences that matter most.
By Frank J. Legan Published
-
Stock Market Today: Dow Climbs 288 Points After Amazon, Intel Earnings
Post-earnings strength from Amazon and Intel helped cushion the blow of a disappointing October jobs report.
By Karee Venema Published
-
Jobs Growth Stalls Amid Hurricanes and Strikes: What the Experts Are Saying
Jobs Report A dismal October payrolls print supports the case for a slow and steady pace of rate cuts.
By Dan Burrows Published
-
Is Intel Stock a Buy, Hold or Sell After Earnings?
Intel stock is moving higher Friday after the embattled chipmaker gave upbeat Q4 guidance, but Wall Street is staying on the sidelines for now. Here's what you need to know.
By Joey Solitro Published
-
Amazon Leads Dow Jones Stocks After Stellar Earnings Report
Amazon stock is higher Friday after the e-commerce and cloud giant reported strong Q3 earnings and Wall Street sees even more upside ahead. Here's why.
By Joey Solitro Published
-
Apple Stock Slips After Earnings. Wall Street Isn't Worried
Apple stock is trading lower Friday despite the iPhone maker beating expectations for its fiscal fourth quarter, but analysts are still bullish.
By Joey Solitro Published